Gordhan takes stock at first Brics bank AGM

Johannesburg - The New Development Bank (NDB or Brics bank) has moved at an unprecedented rate in pursuit of its mandate to mobilise resources for infrastructure and sustainable development projects in Brics and other emerging and developing economies, National Treasury said on Thursday.

This statement follows the first annual meetings of the NDB where the Brics countries - Brazil, Russia, India, China and South Africa - took stock of its first year of operations and charted a course for the future.

Finance Minister Pravin Gordhan led a delegation of the SA government to the event in Shanghai, China, on Wednesday and Thursday. The delegation will remain in China to attend the G20 meetings in Chengdu.

The Brics bank was established in July 2014 when the Brics emerging market nations launched a $100bn development bank and a currency reserve pool in their first concrete step toward reshaping the Western-dominated international financial system. It became operational in July last year.

In May last year, veteran Indian banker Kundapur Kamath was appointed as head of the executive management team. South Africa is represented by the minister of finance on the bank’s board of governors.

Among the Brics bank's first loans was a $180m facility for Eskom. The bank also issued a renmimbi denominated green bond, mobilising approximately $448m in the process and finalised its core operational policies in its first year.

Treasury said the NDB's unprecedented efforts to fund infrastructure and development projects in Brics and other emerging and developing economies, complemented the existing efforts of multilateral and regional financial institutions for global growth and development.

According to Treasury, the NDB aims to challenge existing multilateral development bank convention in support of policies. The NDB wants to distinguish itself as a bank for and by developing countries through, among other things, swift approval of loans; effectiveness of country systems in the implementation of projects; and the provision of development support in domestic currency.

It wants to focus on local currency bonds as much as possible, obtaining a credit rating to reduce cost of borrowing, sharing of knowledge and expertise. Another aim is to reduce the bureaucratic hurdles to financing.

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